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The "Facts" Don't Always Tell the Whole Story: Real Estate is LOCAL and PERSONAL.

By
Real Estate Agent with ACME Real Estate

We have dear friends in Washington, DC, one of whom is a blogger at The Atlantic and recently posted this article:http://www.theatlantic.com/business/archive/2010/08/home-sales-plunge-in-july/61960/.

I replied this way on the actual site:

"I have to admit, Megan, I love you, but your assessment looks at numbers only, and not at quality of inventory and quality of buyers. Properties were routinely underpriced, that's what caused some bidding wars. Further, if things were overpriced, they sat on the market and sellers typically did come down. Finally, in the DC market, a stable market, there are many gainfully employed 2-working-adult purchasers, and it is my estimate there are more qualified buyers with good credit there than in many other places in the country. Real estate is local, and from just watching you and Peter's experience, it seems to me that it could have been different. And also, I feel that there were prejudgments about what the "market should be" that you might have had going in. The bottom line is, "Did you get a house you like/love at a price you can afford?" If so, congratulations. You win. Talk to me in ten years about whether or not it was a good investment. P.S. The summer is always slow. Fall and Spring are the numbers to watch."

Then, someone on my Facebook asked, "How can a person disagree about the facts?" Well, here's my answer:

"Because "facts" don't take into account the actual quality of the houses and the quality of the buyers. That's how. If a house is underpriced, it gets multiple offers in a market where there are qualified buyers. If a house is overpriced, it sits. Then we report, "Houses sold for 10% over asking." Or "Houses had to reduce their prices by 10%." Well, were they priced right to begin with? Houses have a RANGE of value, largely based on condition, neighborhood and the number of qualified buyers in a particular area. In the hotter neighborhoods, with more buyers, guess what? Prices are darn stable and properties ARE appreciating. But you make a good point--when people say the real estate market is "bad," you have to ask which side of the transaction they are on. When it's a "hot market," sellers can sell for more profit, but the houses they want to buy cost more. When the real estate reports are "dreadful," it's a GREAT time to buy (maybe sellers don't make as much profit on their sale but they buy their next house for cheaper). So, in my humble opinion as a real estate professional, the hype is just that--selective numbers to substantiate some perception. Guess what? People always want to buy and sell, and just like the stock market, you just have to pay attention to when it is a good time for you personally, in your market, to buy or sell."


Real estate is LOCAL, and how I wish Realtors would be interviewed in these stories (I frequently see Realtors being interviewed on real estate particulars such as staging or new construction condos, but rarely on the overarching market). Different markets have different trends, and frankly, the summer real estate market in Washington, DC is rarely hot.

One other note...people have different experiences buying and selling their homes also due to who they are and how they operate. Some people sail through the process, some stress out. It is a very personal experience, especially the first time, and not everyone understands how to allow their expectations to be changed by the reality of the process. We have to adjust to changes in the lending markets, too, so it's not just buyers that need to be flexible.

Journalists and readers should take into account the main purpose of buying a home, the intangibles, too. Pride of home ownership, paying yourself back, tax breaks, etc., and plan to stay there until the time is right to sell. NO ONE can predict the future, and there have been booms and busts throughout American home sales history.

"This mess" is the result of overzealous homebuyers and lenders, that is true, but don't blame the market for stabilizing. It should be GOOD news that prices aren't going up like they were a few years ago.

Posted by
Courtney Poulos, Realtor, GREEN, EcoBroker Certified | 323.919.0375 direct | DRE 01882678

Bruce Walter
Keller Williams Realty Lafayette/West Lafayette, Indiana - West Lafayette, IN

I appreciate your rebuttal, Courtney and I am so glad that real estate markets are local.  Still when our consumers in Lafayette watch the national news they are oft times getting a look at markets in Florida, Arizona, Nevada, and California and they listen to all that bad news.  It is our job in our market to let them know what is going on about home prices in the Lafayette market.

I enjoyed your answer to the Facebook question; that has to make you feel good that you are getting good questions like that on FB.  What an opportunity!

Aug 24, 2010 01:58 PM
Vince McEveety
Gilleran Griffin Realty - Sherman Oaks, CA

i n t e r e s t i n g

there is no national market

just a lot of little markets and knowledge is key

education is the gift you give to your clients

Aug 24, 2010 04:23 PM
Robert Jarvis
Keller Williams, Chicago, IL - Chicago, IL
MBA

just as much, there is not local market for the major metro area's.  You can drive 1 mileaway from one area and these figures change.  So you have little markets and neighborhood markets and we should be prepared to differentiate between them both.  Good rebuttal!  Loved it!

Aug 24, 2010 04:32 PM
Blake Clifford
McColly Real Estate - Lowell, IN

In NW Indiana and the Chicagoland market, just as Robert stated, drive a mile and see the difference.  Very good post!

Aug 24, 2010 04:40 PM
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

I have spent my afternoon assuring clients that real estate is local.  Texas is weathering the real estate market better than other parts of the country.

Aug 24, 2010 04:56 PM
Ed Gillespie
WealthWise Mortgage Planning, a Division of American Pacific Mortgage Corporation NMLS #1850 - Folsom, CA

Courtney, you make a good point about the "quality of buyers".   I talk with a lot willing buyers only to find out they lack the ability to obtain financing due to a recent short-sale, foreclosure or BK.  There are lots of them out there and they will be off the home-buying grid for several years.

Aug 24, 2010 06:44 PM
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

Facts and one thing. Interpretation of facts is something else. Take statistics, for example,...

http://en.wikipedia.org/wiki/Lies,_damned_lies,_and_statistics

Aug 24, 2010 07:23 PM
Loreena and Michael Yeo
3:16 team REALTY ~ Locally-owned Prosper TX Real Estate Co. - Prosper, TX
Real Estate Agents

My one simple answer, because we are humans and we don't do things or make decisions just based on facts.

Aug 25, 2010 12:14 AM
Donald Tepper
Long and Foster - Fairfax, VA
DC area investor helping heirs of inherited homes

It is true that real estate is local. And I generally agree with your evaluation of the Washington, D.C., area. I'm licensed in Virginia, live in Northern Virginia, and have lived in D.C. or Virginia all my life.

Having said all that . . . 

Real estate is local. Huh? Yes, in the D.C. area it's still local. And so while the description you provided is applicable for some areas--some areas of Northwest D.C., and Arlington, and certain areas like McLean and Oakton, it isn't true for others. There have been brutal price collapses in Manassas and Prince George's County. And even certain areas in Falls Church and Springfield. That's to name just a few. And that's because lower-end townhomes worth maybe $100,000 were selling for $325,000. Or single-family homes worth $300,000 were selling for $550,000.

Beyond that issue, you wonder why the media don't interview Realtors on broader issues. Two reasons: Most Realtors aren't competent to speak on broader financial issues. And most reporters don't know anything about it, either. The reporters don't know what questions to ask, and--if they did--the Realtors couldn't respond competently. That's not a criticism of Realtors--they know what they know: How to help clients buy or sell homes. That's more of a criticism of reporters--if they're writing about something (economic trends, for instance), they should have at least a minimal understanding of what they're writing about. Most don't.

Besides, assume you're a reasonably competent, intelligent reporter. You call up 3 or 4 Realtors and ask: "Is now a good time to buy a house?" What's the answer going to be. Come on, you know: "Now is a great time to buy a house. Interest rates are at historic lows. Prices are amazing. There's great inventory. And while the first-time homebuyer tax credit is gone, if you need to replace windows, or HVAC, there are great credits for that."

How many Realtors are like to admit that prices might go down further? Or mention that a buyer's job stability should play a large role in the decision. Or that not everyone is cut out to be a homeowner. And a dozen other legitimate concerns?

So the reporter thinks, understandably, "Better not ask broad questions like that. I'll get a canned one-sided response. Perhaps if I ask much more narrow questions I'll get something useful."

Aug 25, 2010 12:20 AM
Kathy Clulow
Uxbridge, ON
Trusted For Experience - Respected For Results

Courtney - Stats are meaningless unless you have full knowledge of the underlying facts John's Wikipedia link is a good one.

 

Aug 25, 2010 12:29 AM
Michelle Francis
Tim Francis Realty LLC - Atlanta, GA
Realtor, Buckhead Atlanta Homes for Sale & Lease

Courtney, 

Good post.  Statistics are a guide, a knowledgeable local expert is a excellent resource along with that guide.   It's going to be interesting for a while. 

Interestingly, even within our city or community, there are some pockets that are much more healthy than others... ie no signs vs many signs (homes for sale).  Some of the transitional areas that didn't finish transitioning are still really struggling, while some other neighborhoods don't have a single home on the market.  

All the best, Michelle

Aug 25, 2010 01:31 AM
Liz and Bill Spear
Transaction Alliance 513.520.5305 www.LizTour.com - Mason, OH
Transaction Alliance Cincinnati & Dayton suburbs

Courtney, John beat me to the quote.  "Facts" don't mean anything without context and understanding of what they represent.  Real estate can be as local as a subdivision, with variation across a town or city, so many "it depends" to interpret.

Aug 25, 2010 02:24 AM
Courtney Poulos
ACME Real Estate - Silver Lake, CA

Thank, everyone, for your responses.

Donald, with regard to your assessment of Falls Church and/or Manassas, you prove the point that real estate can even be MORE local than metropolitan area. That's exactly right. Check your comps if you are going to buy or sell, because not every neighborhood is in the same boat.

To your other point, you said: "Besides, assume you're a reasonably competent, intelligent reporter. You call up 3 or 4 Realtors and ask: "Is now a good time to buy a house?" What's the answer going to be. Come on, you know: "Now is a great time to buy a house. Interest rates are at historic lows. Prices are amazing. There's great inventory. And while the first-time homebuyer tax credit is gone, if you need to replace windows, or HVAC, there are great credits for that."

Maybe the question SHOULDN'T BE, "Is now a good time to buy a house?" Maybe that's the wrong question. Perhaps the right question is, "What is going on in the market in NW DC?" Or, "How is the market for your buyers?" or "How is the market for your sellers?"

If you asked that, I bet for sure you would get an honest answer from a Realtor. Further, you wouldn't be playing into the HYPE game of the news media that is always searching for a "bottom of the market" and to answer impossible questions.

Further, maybe we should flip the question and say, "Is now a good time to rent?" To which the response could be, "Well, how long do you have the luxury of paying someone else's mortgage?"

Aug 25, 2010 03:48 AM
Tammie White, Broker
Franklin Homes Realty LLC - Franklin, TN
Franklin TN Homes for Sale

Courtney, there are so many factors that go into buying and selling a home.  Blanket statements just aren't true for everyone.  Real estate is local and sometimes can even differ from neighborhood to neighborhood.  Good rebuttals.

Aug 25, 2010 06:22 AM
Donald Tepper
Long and Foster - Fairfax, VA
DC area investor helping heirs of inherited homes

Courtney: All very valid points. Interestingly, this afternoon I posted a comment on a blog that was taking NAR to task for bluntly putting the decline in home sales out there. The poster--and I don't want to misrepresent his sentiments--seemed to be saying that because we finance NAR through our dues that they ought to be putting the most positive spin possible on those numbers, and perhaps really shouldn't be publicizing "bad" information at all. I strongly disagreed.

And you're 100% correct that reporters don't ask the "right" questions much of the time. That gets back to their lack of detailed knowledge on a topic. I was a reporter once, and I know. Even now, in the writing I do (and am paid for), I end most of my interviews with: "You've provided some very helpful information. But is there anything else I should know? Anything I should have asked that I haven't? Anything you think our readers should know?" And--even when I'm very well-versed in a topic--that question almost always sheds some new light on the topic, or provides some additional element that I didn't know about and that will benefit the readers.

Unfortunately, I don't know too many reporters who do that. Partly, it's because it's uncomfortable to admit that you don't know it all. And it's also because a lot of reporters--and their editors--already have the story line mapped out before writing. That's not criticism. That's just the way it is.

I'll give you a great example. There's a service called HARO--for "Help A Reporter Out." Three times a day, they'll send out media/reporter requests. A lot of recipients are PR types who have clients who--if things work out--can be quoted on the topic. But--and I haven't planned this in advance--let me go through the last few I've received. I've just selected some of the real estate-related topics. These are reporter inquiries, giving you an idea of what stories you may be seeing in print or on the Web in the next days and weeks:

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Is Haunted Real Estate A Good Investment: I am doing a story about haunted real estates. I'd like to speak with real estate experts who can discuss whether a haunted house is actually a selling point. I'd also like to speak with hospitality industry experts on whether having a haunted room or hotel actually boosts business.

Home Seller Financing: I am looking for lenders, realtors and/or sellers who have recently used seller financing to sell a home. Not rent-to-own - I am looking for someone who has held a second house loan or something along those lines.

Looking For Landlord Stories: Looking for some personal anecdotes to flesh out an article on how to be a landlord. Tell me about your best/worst landlord! If you have a particularly funny or pointed story, please let me know!

Hamptons House Loan Delinquencies: Looking to interview an investor, broker, lawyer and any other real estate professional about house loan delinquencies and short sales in New York's Hamptons market.

Families Sleeping in Cars: Do you know of entire families that have been forced to live in their car because they've made homeless during the economic downturn? Does your agency assist these people to find alternative housing arrangement or jobs? Must be New York based. Story is for a major US newspaper and happy to provide details on contact.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Some interesting ideas there. But note that the stories are already plotted out. So, when someone is talking to a reporter, it's useful to know that while the reporter isn't out to make you look bad (well, not most of the time, anyway), it's difficult to get a reporter to step back and think: "Hmmm. Maybe I should take a different tack on this story."

I do appreciate your comments on my comments. Thanks.

Aug 25, 2010 12:35 PM
Li Read
Sea to Sky Premier Properties (Salt Spring) - Salt Spring Island, BC
Caring expertise...knowledge for you!

Appreciated the reblog, as I had missed this terrific post, earlier.

Aug 26, 2010 04:18 AM
Courtney Poulos
ACME Real Estate - Silver Lake, CA

Thank you all for your comments. To come back to Donald's points--very valid. I once was also subscribed to HARO--but it was infuriating to see how many major papers come up with story ideas first and then write the story second. We're all being manipulated by false news, and it is infuriating!

Believe it or not, I graduated from UMCP with a BA from the prestigous College of Journalism, so I am particularly attuned to the ways that people are violating ethics codes and the basic standards of honest journalism.

Thank you for your thoughtful comments!

 

Kind regards,

Courtney

Aug 29, 2010 06:30 PM